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By the Numbers

Featuring brief segments of economic analysis from our senior economist Michael Bazdarich, PhD.

The economic analysis we previously featured in By the Numbers is now available on the Western Asset Blog. This page will no longer be updated.

October Retail Sales Not Horrible, but Still Disappoint the Markets

Retail sales turned in another lackluster performance in October, with total sales up 0.1% on the heels of a -0.2% revision to September, while the control measure we track was up 0.3%, with no revisions to its previous levels. These swings weren’t horrible, but they came in the wake of a string of stronger gains over the summer and a soft September number a month ago.

The numbers were a disappointment to most market analysts, who had been hoping for renewed strength in retailing to offset the weakness in domestic capital spending and US exports. So, no joy in Mudville from today’s data..

On the other hand, today’s overall retail data are not as gloomy as the stories emanating from major retailers’ recent earnings and revenue announcements. There is no disconnect between these competing news items. Within the retail sales data, sales at department stores, clothiers and grocers did indeed decline. However, those declines were offset by modest gains at restaurants, specialty stores and online vendors, allowing the meager gains in overall sales.

The accompanying chart shows the overall situation. Sales growth moved somewhat above previous trends in spring and early summer, but has since been falling back toward those trends, just as happened in early-2013 and late-2014.

Sales are still above-trend, year-to-date, but not enough so to stem the softness in other areas of demand for US manufactured goods. The 2015 factory slump continues, and that is exerting a substantive—but non-catastrophic—drag on US economic growth. Still, there is likely not enough weakness in these numbers to quash the Fed’s modest tightening intentions.

Retail Sales Trends
Retail Sales Trends Chart
Source: Census Bureau. As of 31 Oct 15. “Control” retail sales is total sales less vehicle dealers, service stations and building material stores.

Michael Bazdarich

Product Specialist/Economist

Mike brings more than 45 years of experience to his position. "By the Numbers" will address economic data releases that are pertinent to a broad range of investors.

Prior to joining the Firm in 2005, Mike ran his own consulting firm, MB Economics. He earned his PhD in Economics at the University of Chicago.

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